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International Bankers Have Lost Faith in Each Other’s Banks

Written by Gary North on June 3, 2013

In 2007, bank lending across borders peaked. Since then, it has declined by 40%. This is a vote of “reduced confidence” by bankers on the international banking system.

Cross-border lending fell by 1.9% in 2012, reports the Bank for International Settlements, the central bankers’ central bank. The main reason was a decline of 5.2% into the Eurozone area.

There is lending across borders other than bank-to-bank lending. The banks’ share is now at 38%. This is a record low. It was 46% in 2007. Year by year, it falls.

The bankers don’t trust banks in the developed world. The BIS report made this assessment: “The decline in global cross-border interbank positions was more pronounced in 2012 than in previous years.”

In other words, it’s getting worse, not better. Five years after the peak, it’s getting worse.

There was a 16% decline in global lending to U.S. banks.

The bankers are losing confidence in the solvency of the banks in the developed world. They do not see the situation as getting better. It is getting worse.

Continue Reading on www.bloomberg.com

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2 thoughts on “International Bankers Have Lost Faith in Each Other’s Banks

  1. Exactly. That is why the central banks are coming after bank deposits, 401k's, IRA's and the rest. The head of the IMF said the seizure of checking accounts in Cyprus could be a "template for the rest of the G-20 nations".

  2. Good point! It seems like banks in the developing world are more solvent than in the developed world! I have seen banks in asia that have 30% of there capital on reserve! I don't think we have seen that in America sense world war 2 !